Supply Chain and the multichannel buying experience

Wednesday 26 March 2014 - Editorial Assistant

After years in the doldrums, the housing market has come to life. A combination of low interest rates, the government’s Help to Buy scheme and falling unemployment saw mortgage approvals in January rise to the highest level in six years (Bank of England). With house prices up 2.4% in February, the biggest monthly increase in five years (Halifax House Price Index) the outlook for 2014 is a bright one.

In such a buoyant market, there is significant opportunity for home and leisure retailers. A new house drives sales in items such as kitchens, bathrooms, white goods, furniture and soft furnishings as owner’s kit out their new home.

The Christmas trading period saw definite winners in home retail: John Lewis reported a 7% increase in sales, Dixons 5% and Topps Tiles were up 9.3% in the 13 weeks to the 28th December. The Next Homeware business is another flourishing example in the home furnishings market. With modern light and airy store formats, flexible delivery options and an online directory of 3 million plus active customers buying through the Next Directory home catalogue.

With customers shopping via a range of channels, it is important to provide a flexible and seamless shopping experience regardless of whether the customer visits a store, orders online, over the phone or through an app. The supply chain is integral for retailers to deliver the seamless cross channel experience that consumers expect, and meet ever-changing fluctuations in demand.

Delivering on time, ensuring there is good stock availability and taking a consistent approach to delivering a great experience online and in store is important to make sure that the customer’s experience is positive, especially if they have ordered remotely. Cost management is also key in both arenas however, by offering cheaper online deals with free delivery there’s a growing risk of decreasing footfall in stores. In addition, increasingly shorter lead times, i.e. within 60-minute delivery windows, mean that routes to market need to be less complex to meet demand. Consumers can now dictate a dedicated time and place that the retailer is required to meet this to deliver a great customer experience.

As logistics provider for Next in two man home delivery, getting the supply chain right is crucial, this means seamlessly managing uplifts in volume, lead times, order tracking, communication and punctuality. The delivery driver may be the first and last person a customer interacts with, and the moment is likely to strongly influence how they feel about the whole buying experience. They are also far more likely to share their experiences, good or bad in this age of social media, so swift resolution of any issue is vital.

The spring and summer trading period is traditionally strong for home retail with the lighter evenings and better weather making home DIY more possible. With this trend likely to continue and the housing market still on the way up, reviewing and assessing supply chain operations from distribution to home delivery is increasingly important. Adapting to deliver a seamless cross channel experience that is flexible to meet consumers ever-changing demands is key to provide a great buying experience.